Thursday, July 9, 2009

Google goes head to head with Microsoft

Google Inc. is working on a new operating system for inexpensive computers in a an attempt to eat away at Microsoft Corp.’s long-standing control over operating system dominance.

The new operating system, announced Tuesday night on Google’s website, will be based on the company’s nine-month-old web browser, Chrome. Google intends to rely on help from the community of open-source programmers to develop the Chrome operating system, which is expected to begin running computers in the second half of 2010.

Google is designing the operating system primarily for “netbooks,” a lower-cost, less powerful breed of laptop computers that is becoming increasingly popular among budget-conscious consumers primarily interested in surfing the web.

Google has already introduced an operating system for smart phones and other mobile devices, called Android, that vies against various other systems, including ones made by Microsoft and Apple Inc.

The Android system worked well enough to entice some computer makers to begin developing netbooks that will run on it. For instance, Acer Inc., the world’s third-largest PC maker, said last month it would make netbooks that run Android instead of Windows. Acer said Android would make the computers less expensive and possibly help them boot up faster.

Google, though, apparently believes a Chrome-based system will be better suited for netbooks.

That is a direct challenge to Microsoft, whose next operating system, Windows 7, is being geared for netbooks as well as larger computers. Microsoft had no immediate comment Wednesday.

A duel between the two technology powerhouses has been steadily escalating in recent years as Google’s dominance of the Internet’s lucrative search market has given it the means to threaten Microsoft in ways that few other companies can.

Google already has rankled Microsoft by luring some of its top employees and developing an online package of computer programs that provide an alternative to Microsoft’s top-selling word processing, spreadsheet and calendar applications.

Meanwhile, Microsoft has been trying to thwart Google by investing billions of dollars to improve its own Internet search and advertising systems—to little avail so far.

In the past month or so, though, Microsoft has been winning positive reviews and picking up more users with the latest upgrade to its search engine, now called Bing. Microsoft is hailing the makeover with a $100-million marketing campaign.

Now Google is aiming for Microsoft’s financial jugular with Chrome its operating system.

Google’s chief executive, Eric Schmidt, and its co-founders, Larry Page and Sergey Brin, have not concealed their disdain for Windows.

Schmidt maintains Microsoft sometimes unfairly rigs its operating system to limit consumer choices—something that Microsoft has consistently denied. Google fears Microsoft could limit access to its search engine and other products if Windows is set up to favour Microsoft products.

Schmidt and Brin are expected to discuss Google’s new operating system this week when they appear at a media conference hosted by Allen&Co. at the Sun Valley resort in Idaho.